How The Creator Economy Is Catering To Metaverse Demands – Zinnov

By Rajat Kohli, Partner, Zinnov, Atul Srivastava, Engagement Manager, Zinnov, Suraj R. Krishnan, Consultant, Zinnov
“Creation, creation, creation—the next ten years is going to be as much about creation as it is about consumption and the community around it, so it’s not creating alone,” is what Satya Nadella spoke a year ago when speaking about the creator economy.
Creating content has never been easy; from reels, videos, statuses, and blog articles, even as you are reading this idea, over 500 hrs. of immersive, interactive user content are being uploaded on major platforms. This equates to over 700,000 hours of fresh content being generated and consumed daily.
Today, this digital media content is democratized through popular applications that bridge the gap between the creator and the audience by allowing them to interact and be paid for their work directly. However, with the emerging concept of “Metaverse” there is a new avenue for content creators to move their businesses and expand their profitability.
Metaverse is the next iteration of internet that will bring digital elements in the real world and merge it with Internet to form virtual worlds. And content creator will be the primary stakeholders responsible to stitch the real world with virtual worlds. The current dynamics within the content creation industry call for offerings that can provide creators new ways to collaborate, monetize, and extend inclusiveness. Therefore, ISVs are leveraging various tactical moves by addressing the creator needs and enter the Metaverses.
For instance, earlier in December 2021, Adobe acquired Frame.io allowed creative teams to collaborate securely and in real-time by centralizing media assets. Similarly, in 2021, Unity, another ISV popular among creators, merged with ironSouce increasing content creators’ opportunity to monetize through their content. Furthermore, recent initiatives by ISVs/ Startups such as Canva, Prezi, Slidesgo, Powtoon, and Vyond signal a move engineered to usher in a new wave of connectivity, productivity, and marketability for creators to build the Metaverses. We have studied key strategic initiatives regarding acquisitions resulting in a product life-cycle extension that will empower the Metaverse creators and their contents.
When we speak of the future of content creation, Metaverse is one area where ISV movements have been high and focused. As creative content becomes increasingly collaborative, the web becomes a more accessible platform for teams to create together. For example, in practice, through Metaverse, the creator community will have access to a plethora of content, such as tool/ pre-coded templates, designs, styles, palettes, and animations shared across a network of creator platforms. The network of creators working on a project will need to work on various aspects of the content while moderating the progress in real-time. Content stored heterogeneously across the systems will result in redoing of tasks, repetition of jobs, and costly delays. Hence as content creation in the Metaverse peaks, real-time collaboration becomes essential to moderate compositions. These collaborations can occur between teams, outside teams, or across platforms, and creator expectations include everything from editing and viewing to sharing in a seamless, interoperable, and device-agnostic environment.
Adobe’s recent strategic moves highlight software ISVs’ desire to create new means of product scaling through adding interoperability, decentralization, and collaborative cloud features. Their partnerships with popular NFT marketplaces in the last quarter of 2021 gave them a path to integrate new monetization and interoperable capabilities into their creator network.
Through the launch of Creative Cloud Express, the company extended its play in building a single creator-focused platform. The platform provides numerous services such as its web services, a creation platform, a resource for all creative projects, photography, video editing, graphics design, UX design, drawing and painting, social media integration, and other powerful apps. Users can build their own SaaS subscription plan and use it accordingly. The acquisition of Frame.io was intelligently placed to complement Creative Cloud’s capabilities by integrating Frame.io’s cloud-first workflow, review, and approval functionality to deliver a collaboration platform that powers the video editing process. The USD 20 Bn takeover of a design competitor consolidates the market and scales Adobe to a level where it can operate as an end-to-end creator-driven platform. It also exemplifies the emerging context of web-based content collaboration for creative productivity rather than PC-heavy suites of software products.
Creators are not catering to specific industries alone anymore, but they are the new economies with 4 Bn people using social media platforms worldwide – each person is consuming an average of 145 plus minutes of videos, blogs, photos, and live streams daily. This creator economy has unlocked new professional opportunities, particularly for Gen Z and millennials, who are drawn to less traditional careers. Based on recent tech industry moves, we see content creation platforms leveraging this trend to introduce hyper-verticalized solutions– meaning proliferating their platforms with industry-specific standards for content creation, moderation, and orchestration. In the Metaverse era, where creators are not restricted to specific industries, offering verticalized cloud solutions based on increasing sophistication and integration of services can help Enterprise adoption of design services. The integration of collaborative tools, project management features, and marketplace access through a web-based environment will not only increase product competitiveness but also help them capture, deliver, and create value to industries beyond their traditional scope.
For instance, in 2019, Canva’s revenue from Canva for Enterprise doubled. A significant contributor to this growth was the increased adoption of visual communication and design tools across real estate, media & entertainment, consumer packaged goods, and technology. The launch of the Canva business suite offering capitalizes on the above-witnessed trend, helping Canva spread its presence by touching various industries where content creation is creating a huge buzz. Through tools such as in-content collaboration, timestamps, alert services, application integrations, and interactive elements, Canva has already onboarded major creators from the marketing, advertising, animation, and filmmaking who are part of varied industries, where immersive 3D content and workflow productivity are becoming a crucial part of business operations. Deployment of an industry cloud strategy by Canva will be tactically placed to help them gradually move out of the shadows of being labeled as a popular tool among members of Gen Z. In the end, the strategies executed by Canva to be valued at 40 Bn has not only expanded their market reach but also carved an intelligent path to divest into modern technologies that empower the creativity required to build Meta-Content.
ISVs no longer function as a marketplace connecting followers and creators but as SaaS platforms with a suite of tools to fuel creators’ efforts. Continually emerging forms of content delivery are leading to highly dynamic usage patterns. Since the creator economy does not solely survive on content creation but is also heavily dependent upon monetization from the content. Bridging the gap between creation and monetization helps a company to generate demand while sustaining its revenue streams. The current technical advancements, such as engaging hyperconnectivity, blockchain, or Visual AI, are creating opportunities for new revenue models.
The acquisition strategy followed by Unity in recent times underlines this fact; its merger with ironSource results from a larger vision to unify multiple modes of a creator’s presence into a unified platform. Pre-merger Unity’s acquisition has been solely focused on simplifying the integration and maintenance of its ad stack. The company’s acquisition of Playnomics, deltaDNA, and Chill Connect helped unify itsAds segments while offering creators new capabilities such as predictive behavior analysis, simulated ad intelligence, and contextual ad targeting.
During the merger, Unity stated its vision: “We know that only a fraction of creators today finds the economic success they’re looking for. And we are combining to realize years ahead of its time, where we combine creation and growth in a single platform to increase creator success.” Eventually, by enabling creators to fund their work, we believe content creation ISVs can increase the economy’s success through formal creation and in verticals beyond the traditional scope of content.
Metaverse is ready to shape the future of work with its related technology that promises to create pioneering and immersive ways for people to collaborate and work online. Based on our estimates, there is a USD 6 Tn opportunity in Metaverse by 2030, out of which creator-focused ISVs have roughly a 2 to 5% stake in the total addressable market. ISVs’ stake in the Metaverse is constantly evolving, with many recent developments suggesting that real-time customer engagement, virtual collaboration among teams and systems becoming an essential criterion of organizational digital transformation strategy. As Web 2.0 companies leap into this transformation, we may see ISVs taking the lead to create an opportunity to make a self-sustaining economy of creators. The opportunity may further increase as many products will reach their end-of-life, and acquisition –mainly to hire talents – will refuel this space.
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